How big is the Wine Market in Japan?
Updated: Mar 17, 2021
For those of you who have read earlier articles on what is Japanese Wine, or what are the major wine regions in Japan, you may know that yes, Japanese Wine has been attracting more and more attention in recent years, and that wine as a whole has also gained popularity among consumers in Japan. But how big exactly is the wine market in Japan? How much has it grown in the past years? What are the driving forces behind these changes?
Today, we will share with you some stats and insights to answer these questions.
How big is the wine market in Japan?
Total wine consumption in Japan in 2018 was 363,936 kl, out of which imported wines accounted for roughly 70% of the total market share, valued at $1.65 billion dollars. Average wine consumption per person in Japan was 3.2 L in 2018 according to the O.I.V., which is still much lower than European countries like France, averaging at 50.2 L / person, or Italy, averaging at 43.6 L / person.
Domestic Consumption Increased 4 times in the last 30 Years
Wine consumption in Japan has more than quadrupled in the last 30 years.
According to the latest stats, total wine consumption in Japan was 363,936 kl in 2017, this is a whopping 4.5x increase compared to the 80,443 kl consumption in 1987. This is inline with the pace of increase in wine consumption per person. In 2017, wine consumption per person in Japan was 2.94 L, a 4.5x increase versus the 0.66 L per person back in 1987.
Despite the increase in overall wine consumption is showing some signs of stabilization, the Japanese market still sees an averaged 4.5% increase in the past decade.
Now let's look at the make-up of the wine consumed in Japan in terms of imported versus domestically-produced.
A steady increase in overall market share is seen in imported wine. Comparing the same 30 year period, domestically-produced wine used to account for 63.5% of the overall market three decades ago, while imported wine only accounted for 36.5%. However, the table has turned, and now imported wine is the dominant player accounting for 68.7% of the whole market, while domestically-produced wine only accounts for just 31.3%.
Why is this? What's driving this shift in the make-up of wine consumption in Japan?
Well, the short answer is, increased supply on the back of various international trade negotiations and agreements that has led to wine being made available at much more affordable prices, and higher interest levels from the consumers.
Major Wine-related Events by Timeline
2007 - The Chile-Japan EPA entered into force, applied tariff rate for bottled wine began a 13-year phase-out from the WTO applied rate of fifteen percent to duty-free, beginning in 2019
2019 - The EU-Japan Economic Partnership Agreement (EPA) signed between Japan and the European Union which abolished wine tariffs, bringing down prices and boosting imports
2020 - A Japan–US trade agreement signed to reduce tariffs on American wines in phases.
Top Countries Among Wine Exporters to Japan
Chili - the biggest player among the various countries that export wine to Japan, saw a near 20% increase in market share in the past 10 years in the still wine market. Chilean wine mostly dominates in the lower price segments (¥500 – 1000 JPY per bottle), selling very well at supermarkets and convenience stores. Interesting to note that the average price per liter of imported bottled wine in 2018 was $5.85, Chili was one the lowest priced at $2.87/L, while Spain $3.05/L, Italy $5.05/L, Australia $4.17/L, France $9.74/L, and U.S. $16.14/L.
France - Second biggest player in Japan in terms of imported wine market share. France has seen a decline in its presence in Japan, going from 39% market share back in 2008, to 25% in 2018 for still wines. France remains its dominance however in the sparkling wine market, accounting for 41% of the imported sparkling wine market according to the latest states.
Italy - Coming in third is Italy. Italy has maintained its 18% market share rather steadily in the past decade. Will be interesting to see if this continues with the recent agreement signed between the U.S. and Japan on reduced tariffs on American wines.
(Source: USDA Foreign Agricultural Service)